Good read. Thanks.

Though, people should stop using Uber as an example as it is rather a negative one.

Uber's example is not that relevant in describing flywheel. If anything, Uber's version of flywheel demonstrated how weak and broken the business model is. At step 5 the whole thing collapses since more supply of drivers means lower prices for rides and less money per driver who has to work more hours to get the same compensation, they consider attractive ONLY when prices were high and/or Uber subsidized rides. Not to mention that at this moment Uber has to increase its own cut leaving drivers with even less money—exactly what it did. Let's not talk about drivers who are stuck in this vicious loop like in Hotel California due to investment in the auto. That's a flywheel of driving unit economics into the ground.

Since that moment the flywheel basically broke the business model sustainability and made it clear that Uber's margin is, in reality, expenses, benefits, amortization, insurance, etc. that drivers have to cover from their own pocket—usually covered by taxi companies aside from paying drivers. Uber obfuscates it by comparing a driver's revenue to a minimum salary but not mentioning that this number should not count all the burden drivers pay and should be compensated for.

Also, it's worth mentioning that Uber isn't really a marketplace. It's inefficient to consider Uber as one. Uber is rather an aggregator where riders don't have a say as to choosing drivers and drivers have no say as to the price. Drivers are effectively a faceless commodity supply. It's not really a market. Uber in this regard is more like Google's search algorithm that decides what to show as a search result. Basically, a rider search destination address and Uber provides search results using its own algorithm. Google is not a marketplace of readers and sites. And Uber isn't a marketplace either.